No case for stimulus withdrawal this fiscal: Montek

NEW DELHI: The Planning Commission on Monday said there is no case for withdrawal of stimulus in the current financial year until growth picks up to 7 per cent.

"I don't believe, in the current financial year, there is much of a case for exit (from stimulus measures)," Planning Commission Deputy Chairman Montek Singh Ahluwalia said.

"Until growth picks up to 7 per cent, there is no immediate case for reversal of policy," he told reporters.

On monetary policy also, he said, "I don't think at the moment, policy needs to be changed."

The country would need to think about when to recalibrate the monetary policy, even if the economy moves out of the slowdown next year, he added.

He said the government must go ahead with its expenditure as planned and not bother much about the projected fiscal deficit of 6.8 per cent for the current financial year.

"6.8 per cent is not a problem. Economy will bear it. The expenditure that was planned should take place," he said.

On industrial growth in August, which touched a whopping 10.4 per cent, he said it indicates a rebound.

"We did expect a rebound in the second-half of the year. We did expect that the economy would be better," he said.

On the overall GDP growth, he said clear picture would emerge only after the mid-term appraisal by the Planning Commission by the end of the current calendar year.

"We had said 6.3 per cent. That was based on assumption of drought, but we can do better than 6.3 per cent," he said.

Further, Ahluwalia said the current fiscal is unlikely to be a good year for exports as they are dependent on global economy. However, he added, "2010-11 would be better ... data suggest global economy has bottomed out."